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Oil price fall prompts Opec meeting

Organisation set to discuss effect of global financial crisis on the oil market.

16 Oct 2008 19:33 GMT

Oil has dropped by more than 50 per cent since July to below $67 per barrel [EPA]

Oil prices have fallen by more than 50 per cent from the record high of $147 per barrel, due mainly to fears of a global economic downturn.

Lawrence Eagles of JP Morgan said that Opec were looking for a price of at least $80 a barrel.

He said: "They are concerned that the momentum was going to pull it down to $60 ... At around $60, it starts to impact the Saudis' budget."

Manipulation

Controlling supply would provide price manipulation. Abdullah al-Attiyah, Qatar's oil minister, told Al Jazeera that he expected Opec to cut oil production by one million barrels per day or more at next week's meeting.

He said that the meeting was brought forward so that "we can take action before solutions become more difficult ... Prices have plunged in a very big way."

Opec did not give further details on why the meeting had been moved, but the body said last week that it would hold the meeting to "discuss the global financial crisis, the world economic situation and the impacts on the oil market".

They said: "The subprime mortgage problems that have been observed for a long time have created a shock wave in financial institutions resulting in huge losses, and an escalating credit squeeze which has turned into a deep financial crisis."

The price of oil continued to fall on Thursday, with Brent crude closing lower on $67 a barrel, its lowest level for more than 15 months.